The HardRock coal mine in the Fingal Valley received state government approval yesterday and should be operational within three years.

Construction on the $50 million Valley Road mine is scheduled to start by the end of this year and should create about 80 jobs.

Resource Minister Bryan Green said the entire project was expected to create more than 100 jobs and be worth $6 million a year in royalties to the state government.

``The project will not only bring valuable investment and jobs to the Fingal Valley it will also have enormous flow-on benefits for the North-East region and the broader Tasmanian economy,'' Mr Green said.

Mr Green said the project would create a 40 per cent increase in Tasmanian rail freight and a 30 per cent increase in sea freight out of Bell Bay, but did not say how that increase would be managed.

Liberal mining spokesman Adam Brooks welcomed the announcement, saying he ``strongly supported'' the project.

But Mr Brooks alleged the government's decision to create more forestry reserves meant it would lock up more areas from mining - an allegation Mr Green has frequently disputed.

``Bryan Green has admitted that this venture will inject an estimated $180 million a year into the Tasmanian economy,'' Mr Brooks said.

``This goes to prove just how valuable mining is to Tasmania's economy and how crucial this industry is to our future prosperity.''

It is the fourth significant mining lease granted this year but the least controversial.

The Shree Minerals mine at Smithton and Venture Minerals projects at Riley and Tullah fall within the Tarkine net and have all faced challenges from environmental groups.

A legal challenge against the Riley mine is ongoing and a new federal court challenge against the Shree Minerals project has been threatened.